Businesses are desperately cutting costs and reducing the size of their workforce due to fears of an impending recession, a survey found yesterday.
Eighty-four per cent of businesses taking part in the study, which was carried out for accountants MacIntyre Hudson, said they thought there was a significant deterioration in the overall economic climate for business in the last 12 months.
In light of these fears, 30 per cent of companies said they were cutting jobs, with 75 per cent saying they were imposing stricter controls on expenditure.
While some businesses are experiencing the effects of the downturn already, more are concerned about economic prospects in the coming months, with 78 per cent saying that media coverage of the credit crunch had reduced their confidence.
Client Principal at MacIntyre Hudson, Andrew Burnham, said: “For them, fear is the driving force. The response is both rational and sensible, but illustrates the problem for policy makers in re-establishing the business confidence and spending required for economic growth to resume.”
The survey also found that the economic downturn had hit work-life balance, with 33 per cent of respondents saying they are working longer hours – despite the fact that 43 per cent are already working over 50 hours a week.
But Burnham said it wasn’t all doom and gloom. “The majority of those surveyed have not changed their plans for their exit from the business or their retirement date. Although businesses are starting to suffer, there are also always firms that thrive in a downturn,” he said.